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Local shares gain, led by Steel & Tube

NZ NewswireNZ Newswire 12/08/2016 Sophie Boot

New Zealand shares hit a fresh high led by positive earnings from Synlait Milk and Steel & Tube Holdings, while Auckland International Airport fell.

The S&P/NZX 50 Index rose 9.27 points, or 0.1 per cent, to 7,363.1. Within the index, 28 stocks rose, 13 fell and 10 were unchanged. Turnover was $186.2 million.

A2 Milk Co led the index higher, up 4.4 per cent to $2.12, after its supplier Synlait Milk said annual profit more than doubled to between $34 and $35m on sales of higher-margin products. Synlait's shares, which aren't on the NZX 50, gained 7.8 per cent to $3.73.

"Their gross profit per tonne jumped, there's solid demand for canned infant formula," Peter McIntyre, investment adviser at Craigs Investment Partners, said.

"That flows into A2 because A2 gets a lot of its powder from Synlait, the two are symbiotic in some respects. Remembering where Synlait's come from in the last year that's a solid result in a market that seems to be saturated with milk product."

Steel & Tube rose 4.3 per cent to $2.19. The steel products manufacturer posted full-year earnings that beat guidance and lifted its dividends as the contribution from new acquisitions and cost savings helped offset weaker prices and margins, and costs related to "quality issues".

Metro Performance Glass gained 2.6 per cent to $2. The company, which holds more than half of New Zealand's glass processing market, has made a move across the Tasman with the purchase of Australian Glass Group for $A43.1m ($NZ46.09m) in a debt-funded acquisition that will immediately add to earnings.

Auckland International Airport was the worst performer, down 1.7 per cent to $7.06.

"It's back 2 per cent for the week rolling in a market that's been driving to record highs on a daily basis," McIntyre said.

"A lot of brokers are concerned about possible regulatory threats, a lot of brokers have price targets well below where it's currently trading. A bit of money's been taken off the top and distributed amongst other stocks. It's widely owned by institutions and maybe they're taking some profit today."

Metlifecare advanced 2.5 per cent to $5.80 and Summerset Group rose 2.1 per cent to $4.96.

Vector gained 0.6 per cent to $3.47, Warehouse Group dropped 1.4 per cent to $2.80 and Air New Zealand fell 1.4 per cent to $2.20.

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